3 Stocks With Short Squeeze Potential

These heavily shorted shares could burn those betting against them, argues a NY hedge-fund manager.

Contrarian investors often buy hated stocks. One New York money manager has bought stakes in three companies that others are betting heavily against. Conditions are right for what's called a short squeeze, he says. That's when good news propels a stock higher, forcing short-sellers, who sell borrowed shares in hopes of buying them back in the future for less, to close out their positions. The extra buying can give shares a powerful boost.